Sunday, March 3, 2013

Aeonian Investments Company Ltd

Aeonian Investments Company Ltd was
incorporated in 1981 by one branch of the 3 founding families of Asian Paints
viz. Choksey’s.

The
company invests in shares - both quoted and un quoted and Units of Mutual
funds. Investments in capital market is mainly through reputed Portfolio
Managers and to some extent on its own. The Company is managed by the Board of
Directors, with Mr. Amit Choksey as its non executive Chairman.

Some recent updates:

Aeonian
held 23,55,847 shares ( 32.04% ) in Sunshield Chemicals ltd and must have
realized approx Rs.12.04 cr from the sale of the shares to Rhodia

The Choksey Group (in personal capacity)
held 21.14 lakh shares and must have realized approx Rs.10.78 cr from the sale of the
shares to Rhodia

Aeonian Snapshot:

Equity
: 0.96 cr ( FV Rs.2 )

Debt
: Nil

CMP : Rs.148

Market Cap : Rs.71.04 cr

Promoter
holding: 86.96%

Dividend record:

2011-12: Rs.4 per share

2010-11: Rs.4 per share

2009-10 :Rs.4 per share

2008-09:Rs.3 per share

2007-08 :Rs.7 per share

2006-07:Rs.7 per share

2005-06: Rs.7 per share

Valuation of investments:

Listed
investments :Rs.76.62 cr ( as of March
31, 2012)

For
the sake of current valuation, we’ll maintain the inventory valuation at same
level as of March31, 2012. Some investments like Asian Paints ( 42,245 shares
as of March 31, 2012) have grown by nearly 40% over the last 10 months while
others like Cox & kings, S Kumar have performed poorly.

Aeonian
Annual Report for 2004-05 also shows the investment in Mazda as 5.36 lakh
shares, so it is safe to assume that Aeonian holds about 31.71% of Mazda’s paid
up capital. Last years EPS for Mazda was about Rs.95 ( approx) , so applying a
PE of 5, one can assume a price band of about Rs.450-475 per share of Mazda

Hence
we’ll value the Mazda investment atabout Rs.24 cr

2)Cybele Paradise Pvt Ltd : 5.07 lakhs sharesvalued at 0.67 cr

Cybele Paradise is into the business of Leisure and
Entertainment and runs Orama Family Entertainment Centres which offer 4D / 5D
movies &gaming areas

Since no information about the financials of Cybele are
available, we’ll value the company at its holding cost i.e. Rs.0.67 cr

The Annual reports for 2002-03, 2003-04, 2004-05 speak about
premises at Worli given on leave and licence and that the licencee has not been
paying rent since May 2000. We’ll not factor these premises into the total
valuation in absence of details about the current status.

In 2003, the company had invested Rs.5.65 cr in Office space.
Considering the movement in property rates over the past 10 years, it can
safely be assumed that the property should be worth not less than Rs.15 cr

Promoter holding is 86.96%. They
have 3 options in order to comply with SEBI regulation for minimum
shareholding:

1)Reduce
stake to 75% through OFS on BSE or

2)Issue
bonus to non promoter shareholders. Bonus issue would need to be in the ratio
of 7: 3 or thereabouts or

3)Delist
the company.

Option 1 is a strong probability.

Option 2 would amount to a direct
wealth transfer from promoter to non promoters and unless quasi promoter
holding ( in the non promoter category) is very high, this seems unlikely.

Option 3 , assuming a delisting
price of about Rs.225 – 250 per share, will entail a payout of about Rs.14 -16
cr. Promoters have recently realized about Rs.10.78 cr from Sunshield Chemical
stake sale. So this possibility too cannot be ruled out.

All in all, an interesting stock to
follow.

At the time of writing this report, the
author /his family have an investment interest in the stock mentioned above.
Under no circumstance does the information in this report represent a
recommendation to buy or sell the above-mentioned stock. This report has
been prepared and issued on the basis of publicly available information,
internally developed data & other sources believed to be reliable. This is
just a suggestion solely for information purposes and does not constitute a
solicitation to any person to buy or sell a security. While the information
contained therein has been obtained from sources believed to be reliable, no
responsibility (or liability) is accepted for the accuracy of its contents.
Readers using the information contained herein are solely responsible for their
actions and are advised to satisfy themselves before making any investments.